Blog

Those Daily Mail figures keep coming – who’s counting?

19 Aug 2011, 15:00

Robin Webster

The Daily Mail's volley of contradictory numbers attacking green
energy is continuing. This week they are aided by the release of a
new book, Let
Them Eat Carbon, by the free market TaxPayers' Alliance.

In an editorial
entitled "No room for dogma in these hard times", the newspaper
discussed the impact of rising fuel and food prices on households.
It said:

"…the Mail urges ministers to do what
they can to ease the corrosive effects of inflation by halting
their politically correct obsession with green energy taxes. As we
reveal today, EU emissions directives alone are costing households
up to £115 a year - money that is desperately needed elsewhere in
the economy."

The estimate that "EU emissions directives alone" are costing
households up to £115 a year appeared to be based on the following
figures,
outlined elsewhere in the paper and sourced to the TaxPayers'
Alliance:

"The Renewables Obligation, under which
energy companies have to invest in alternative energy sources,
costs £1.1billion, or £40 per home.

"These schemes are in addition to [other
hidden] green taxes consumers pay in their energy bills."

£75 plus £40 is £115.

Attributing the costs of the Renewables Obligation - which is
the UK government's main mechanism for supporting large-scale
generation of renewable energy - entirely to the EU seems a bit
tenuous and perhaps says more about the Mail's attitude to the EU
than anything else.

Leaving that aside, the figures quoted by the Mail are wildly at
odds with government estimates. When we asked DECC for their
figures on the impact of the Emissions Trading Scheme and the
Renewables Obligation on domestic bills, they pointed us their
latest figures in Appendix D and E of
this document (pdf). Table E2 (p21) indicates that in 2010, the
Emissions Trading Scheme accounted for £26 of the average annual
domestic electricity bill, and the existing Renewables Obligation
accounted for £16. These figures are due to be updated this
Autumn.

Ofgem in contrast
estimated in 2009 that the Emissions Trading Scheme contributed
£24 to the typical annual domestic electricity bill and the
Renewables Obligation added around £12 to a typical bill. In
January 2011 Ofgem's estimated numbers were £13 for the Emissions
Trading Scheme and £16 for the Renewables Obligation, as we
highlighted in this blog.

So where does the TPA get their numbers from? Chapter 3 of their
book, officially
launched yesterday, contains the calculations on the Emissions
Trading Scheme. The core to the calculation is how much of the cost
of the Emissions Trading Scheme is passed on to the consumer.

The TPA book estimates that in the UK about 65 percent of the
cost of the scheme are 'passed through' to consumers. But this
appears to ignore the fact that, in this country, households only
account for
36 percent of electricity consumption - so they are hardly
likely to bear 65 percent of the cost.

Secondly, it is possible that the figures do not take into
account the role of industrial emitters of carbon dioxide. As a
policy expert from Sandbag
told us:

"I suspect he has failed to disaggregate
power generators from combustion installations…the combustion
category includes power [electricity], but it also includes
combustion for industrial processes like blast furnaces etc. UK
combustion accounts for 50 percent more carbon permits than UK
power alone."

However it was achieved, the TPA's estimate for the cost of the
ETS on domestic electricity bills is about three to four times
higher than those by Ofgem or DECC. The TPA's estimate for the
costs of the Renewables Obligation is about two to three times
Ofgem's and DECC's.

Anyone reading the Daily Mail is likely to be getting very
confused. Over the last two months they have also:

Claimed in a series of articles that 'green measures' were
adding £200 to an average household energy bill. After it was pointed
out that this figure was based on unreferenced claims by
climate skeptic lobbyists the Global Warming Policy Foundation, the
Mail quietly stopped using
the £200 figure.

Suggested that an average energy bill would double over
the next five years, rising by £1000 to around £2000 "to fund a
switch to green energy and build new nuclear power stations". This
figure came from a
report by Unicredit bank which is not publicly available,
which the authors would not discuss, and which contained no further
detail about how the figure was calculated.

Claimed that "the green tax con" is "costing families £500".
This figure used an out of date methodology as we discussed here.
The TaxPayers' Alliance responded to our blog
here, but the Huffington Post then laid out further criticisms
of the calculation
here.

If the Mail believes that there is no room for dogma in these
stretched financial times, it should perhaps consider what that
means for its own reporting of energy issues.

UPDATE Monday 22nd August: Matthew Sinclair, the author of the
book by the Taxpayers Alliance, has written a
response to this blog, which makes some reasonable points. We
will be writing more on this.